L-Bank brings first €STR FRN with EIB and other SSAs to follow

By Burhan Khadbai

19 Sep 2019

While it is no surprise that a public sector borrower has brought the first floating rate note linked to the euro short term rate (€STR), it was a surprise that a small German agency would bring the inaugural transaction, especially as it is some weeks before the European Central Bank (ECB) is due to begin publishing the recommended new risk-free rate.

After appointing UniCredit on Tuesday “to prepare fixed income investors” for a two year floating-rate note (FRN) linked to €STR, L–Bank priced the transaction just two days later.

The German agency priced the €250m bond with a spread of 200bp over the compounded daily €STR rate, calculated
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